For investors who are looking for a mix of value, income, and growth (who isn’t?), having a list of investing criteria set to determine which stocks may fit their criteria is important. After all, these three goals can often find themselves in conflict. So, finding a top growth stock with a valuation that may look attractive may not come alongside a juicy dividend yield. That’s just how the investing game tends to work.
The thing is, the following three companies each provide a relatively attractive mix of value, income and growth that I think is worth considering. Here’s why these three Canadian stocks are all companies I have on the top of my buy list right now.
Suncor
Canadian energy giant Suncor (TSX:SU) has long been viewed as the preferable way for many long-term investors to gain exposure to the Canadian energy sector. I certainly think that’s a fair assessment of the oil sands giant, given its size and prominence in the North American energy independence story.
What I like about Suncor right now, in particular, is the company’s valuation. Trading at just 10 times trailing earnings with a 4.7% dividend yield, investors are clearly getting the value and income components they may be after with this name. And it’s worth noting that these numbers come after the stock’s impressive rise (see chart above).
From a growth perspective, I think Suncor will be among the slower-but-steady names in this department. But for investors looking for long-term upside from a company with a robust business model and strong cash flows, Suncor deserves a deeper look.
Fortis
Utility giant Fortis (TSX:FTS) is about as stable of a long-term holding as investors can ask for. That said, it’s the company’s dividend growth profile that continues to impress me the most (more than its current dividend yield of 3.7%). For more than five decades straight, Fortis has raised its dividend distribution annually. That’s the kind of growing passive-income stream many investors are after.
In the valuation and growth department, there’s perhaps a more difficult argument to be made. Fortis continues to grow its revenue and earnings in the mid-single digit range, and I expect that trend to continue long term. But its valuation of less than 20 times forward earnings is a bit on the pricey end for a utility company.
That said, for those looking to pay for quality, that’s the price of admission in a stock like this. I think it’s a price worth paying right now.
Scotiabank
Let’s round out this list of all-around stock winners with Bank of Nova Scotia (TSX:BNS), shall we?
The Big Five Canadian bank has continued to produce robust cash flows for years, and its stock price movement has generally been up and to the right. However, some concerns about the Canadian economy slowing and interest rates remaining higher for longer did impact the stock considerably, as the chart above shows.
That said, despite a recent run in BNS stock, this company currently trades at a forward price-earnings multiple of 10.5 times, with a dividend yield of 5.9%. And with a solid track record of dividend increases in its own right, this is a leading bank I think is worth buying on any major dips moving forward.
I expect relatively consistent growth from Scotiabank and think the company’s international focus makes this a unique player in the Canadian financials sector worth buying today for the long term.
